New Thriller: Will Ovitz Go to MCA?

By BERNARD WEINRAUB

Published: April 11, 1995

HOLLYWOOD, April 10—
Michael Ovitz, who helped to create the Creative Artists Agency more than a decade ago and has overseen its remarkable growth into a behemoth that represents superstars like Tom Cruise, Michael Jackson and Sylvester Stallone, is the source of considerable speculation as the choice of the Seagram Company to run the entertainment giant MCA Inc., which Seagram bought on Sunday.

Mr. Ovitz, who is 49 and has moved into advertising, corporate finance and the convergence of entertainment, information and communications, is a close friend of Edgar Bronfman Jr., the chief executive of Seagram, the Canadian liquor giant, and was one of the brokers in the MCA sale.

Not only would the departure of Mr. Ovitz from Creative Artists ripple across the movie, television and music business, but it could also in many ways have a seismic impact on the talent agency business, which Creative Artists has dominated for at least a decade.

Mr. Bronfman, who made his foray into the entertainment business on Sunday with the purchase of 80 percent of MCA from the Matsushita Electric Industrial Company for $5.7 billion in cash, could not be reached for comment today.

Mr. Ovitz, a formidable deal maker in Hollywood, has publicly denied any interest in running MCA, the entertainment conglomerate that controls Universal Pictures; Putnam, the book publisher; MCA and Geffen Records; Universal Studios and theme parks.

At a meeting this morning at the sleek headquarters of Creative Artists in Beverly Hills, Mr. Ovitz told his agents, "You've read the papers, I've read the papers, now let's move on." He declined to comment further today.

Yet Mr. Ovitz's future, which is a source of speculation even in calm times, has turned into a subject with dimensions as riveting as those of any Hollywood film.

People close to Mr. Bronfman said he had offered an honorary chairmanship to Lew Wasserman, who as the chairman of MCA has run the company for decades along with Sidney J. Sheinberg, its president.

Because Mr. Bronfman wants to maintain warm relationships with Mr. Sheinberg and Mr. Wasserman, MCA's new owner also planned to offer Mr. Sheinberg an unspecified position at the studio. "Edgar has no interest in antagonizing Sheinberg, but it's clear he will get someone else to run the place," one person close to Mr. Bronfman said today.

There are several reasons that Mr. Ovitz might want to leave Creative Artists. He is restless, and the care and feeding of movie stars, no matter how lucrative, is not especially appealing to agents in their midlife. Dealing with temperamental actors like Dustin Hoffman, or indecisive ones like Warren Beatty, or difficult ones like Barbra Streisand, can be grating.

Moreover, Mr. Ovitz, though wealthy, hungers to be in the same financial league as his friends like Michael D. Eisner, chairman of the Walt Disney Company, and Barry Diller, former chairman of Fox Inc.

If Mr. Ovitz left Creative Artists, he would be compelled to sell his majority share in the agency to his fellow agents to avoid conflicts of interest. That would open the way for a potential struggle for control of Creative Artists, Hollywood's most powerful agency. Mr. Ovitz's share could be as high as $200 million, according to some estimates.

Ron Meyer, president of Creative Artists and co-founder of the agency with Mr. Ovitz, runs the day-to-day operations and is widely trusted not only by movie stars but also by executives like David Geffen and Jeffrey Katzenberg, as well as others, who have chilly relations with Mr. Ovitz. But Mr. Meyer could face restlessness and a potential insurgency by ferociously ambitious younger agents who are anxious to reach the upper tier at Creative Artists.

Any crack in the fortress-like solidarity of Creative Artists would be exploited immediately by International Creative Management, the William Morris Agency and United Talent, the three largest agencies after Creative Artists.

As speculation centered on Mr. Ovitz, Mr. Bronfman and his father, Edgar M. Bronfman, had lunch today with Mr. Wasserman, who is 82, and Mr. Sheinberg, who is 60. Mr. Wasserman and Mr. Sheinberg have made it clear that they are angry at the way Matsushita treated them and essentially kept them in the dark about the negotiations to sell MCA.

In 1990 Mr. Wasserman and Mr. Sheinberg sold MCA to the Japanese company, pocketing hundreds of millions of dollars in the process but complaining in later years that Matsushita was treating them poorly and, in essence, like employees.

Reached after the lunch meeting today with Mr. Wasserman and the Bronfmans, Mr. Sheinberg said, "It went very well.

"I liked him very much," he said, referring to the younger Mr. Bronfman. Mr. Sheinberg sounded extremely pleased, and his tone seemed to indicate that both he and Mr. Wasserman would remain with the company, though he declined to discuss the details of the meeting.

One reason Mr. Bronfman is eager to maintain a close relationship with Mr. Sheinberg is because Steven Spielberg, the biggest money-maker in Hollywood, is intensely loyal to r. Sheinberg and credits him with being the guiding force in Mr. Spielberg's career. Accordingly, Mr. Spielberg and his partners, Mr. Geffen and Mr. Katzenberg, have temporarily set up the offices of their new studio, Dreamworks, on the Universal studio lot and say they will remain there as long as Mr. Sheinberg stays on.

Mr. Spielberg has extraordinary financial influence: Of the $480 million in cash flow at MCA last year, about $150 million to $200 million came from the home video release of Mr. Spielberg's film "Jurassic Park."

Today, though, it was evident that the departure of Mr. Sheinberg -- and the possible appointment of Mr. Ovitz -- would not necessarily lead to the departure of Mr. Spielberg. People close to Dreamworks said the founders of the company would have no problem working with Mr. Ovitz and staying at Universal, with the right financial arrangements. Mr. Spielberg and his partners are also being lured by Time Warner, Viacom and Sony.

Mr. Ovitz, in the meantime, is carrying on business as usual at Creative Artists. "I'm not looking for a job," he told one friend. But Mr. Bronfman may be looking for Mr. Ovitz to take a job.